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Business, 24.09.2019 00:20 gunnatvinson

Victor is the manager of a local bank branch in college station where he consumes bundles of two commodities x and y. prices in college station are px=1 and py=5. he is offered a transfer to dallas where prices are px=2 and py=8; victor’s utility function is u(x, y)=xy and his income in college station is $5000. (victor’s utility maximization is always characterized by the tangency rule). will victor be able to afford what he was buying in college station if he is offered a salary in dallas that guarantees his welfare is the same with the transfer?

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